National Pension System: Now NPS Lite exit before 25 years allowed if corpus is up to Rs 1 lakh

NPS Lite Untimely Exit Rue Modified. Consultant picture/Pixabay

Nationwide Pension System (NPS) Lite Untimely Exit Rule: The Pension Fund Regulatory and Growth Authority (PFRDA) has made a change to the untimely exit rule for the NPS Lite Swablamban scheme subscribers. As per the brand new determination of the regulator, NPS Lite subscribers can exit earlier than the necessary 25 years if their collected pension wealth just isn’t greater than Rs 1 lakh and they don’t seem to be eligible for migrating to the Atal Pension Yojana (APY).

The utmost age restrict for subscribing to APY is 40 years. So an NPS Lite scheme subscriber having as much as Rs 1 lakh of their pension fund could make a untimely exit. They will do that even when they’ve acquired Authorities co-contribution. Nevertheless, the quantity of the Authorities’s co-contribution will probably be deducted from the collected corpus of such subscribers in search of to exit prematurely.

The PFRDA stated in a round dated 2nd July 2021 that as per the sixth Modification of Exit Laws, the Swavalamban Subscribers whose collected pension wealth don’t exceed Rs 1 lakh and if they don’t seem to be eligible emigrate to APY can decide to prematurely exit with lump-sum fee.

The regulator additional stated that such subscribers “aren’t required to proceed within the Swavalmban scheme for a minimal interval of twenty-five years regardless of the receipt of Govt of India (GoI) co-contribution below Swavalamban by them.”

“Nevertheless, if GoI’s co-contribution was availed by these eligible Subscribers and the identical shall be deducted together with the returns generated from the corpus on the time of their exit,” PFRDA additional stated.

Ultimate corpus calculation on untimely exit from NPS Lite

In accordance with the round, the collected corpus of these Swavalamban scheme subscribers in search of untimely exit will probably be calculated after deducting Authorities’s co-contribution, if any, and the returns thereon.

PFRDA defined the corpus calculation with an instance:

Suppose a Swavalamban Subscriber, who’s aged 43 Years and can’t be migrated to APY, has a corpus of Rs 1,04,000 in his Swavalamban PRAN and out of which, Authorities of India’s co-contribution and returns represent Rs 4500.

On this case, the pension regulator stated that the subscriber will probably be eligible for the untimely exit because the collected corpus within the PRAN can be Rs 99500 (Rs 104000-Rs 4500=Rs 99500).

How you can apply?

For untimely exit, NPS Lite Swavalamban Subscribers having as much as Rs 1 lakh corpus can submit their withdrawal claims to the related POPs/Aggregators. “Central File Maintaining Company (CRA) is suggested to speak to the eligible Swavalamban Subscribers and POP/Aggregators in regards to the clarification thus offered above,” the round stated.